We operate on a fundamental rule of not selling without having approvals in place

- Srinivasan Gopalan, Group CEO, Ozone Group
Here´s a company with a proven track record of innovation and customer satisfaction. Bengaluru-based Ozone Group combines design and technology in all its projects, ranging from residential condos and serviced apartments to integrated townships, hotels, resorts and business parks. Srinivasan Gopalan, Group CEO, Ozone Group, shares more on the company´s strategies for growth in conversation with SHRIYAL SETHUMADHAVAN.

Last year, the company announced plans to develop 2 crore sq ft of residential and commercial space across Bengaluru, Chennai, Goa and Mumbai. What is the current status?
In Chennai, we have an ongoing project, The Metrozone, which is close to 7.5 million sq ft and spread over 45 acre, fully approved; around 60 per cent of construction is done. Last year, we received an approval for 160 acre near the airport in Bengaluru, for which Phase-I has been delivered as we speak. Today, real estate cannot be sold as brick and mortar, and there is a service element attached to it. Hence, part of the township development in Bengaluru is a school, hospital, four-star hotel, 1,000 units segregated for senior living, etc. Also, we are launching a 45-acre development in Sarjapur Road in Bengaluru, which is purely a plotted development.

How about your operations in Goa and Mumbai?
In Goa, we recently received approvals for about 145 acre, and will launch a project close to 1 million sq ft by June 2017. As for Mumbai, we are developing a residential project, Mirabilis, and plan to launch one more project this October. However, we operate on a fundamental rule of not selling without having approvals in place. And in Mumbai, we only take up projects with approvals. So, we have a JV partner who would get the approvals and our USP is to construct and sell.

How do you determine the location for your projects?
Being real-estate experts, we are generally in the know of upcoming locations and where infrastructure is being developed. For example, in 2006 when the airport was announced in Bengaluru, we started aggregating land, and the decision taken back then has benefitted us in the long term. Today, Ozone will be doing maximum sales - close to 100,000 sq ft a month û through our project Ozone Urbana in Bengaluru.

Any procurement activities for your upcoming projects?
We are always on the lookout for new technologies. In Mumbai, we are focusing on 14 and 20-storied buildings that can be achieved in four years´ time. So we have a practical approach. And, to achieve such targets, we use the latest technologies.

What brought you to Mumbai?
Large builders in Mumbai today do not develop less than 1 million sq ft. But even the end-user today does not essentially prefer 1 million sq ft with 500-700 families. As developers, we form the society and walk out. But managing a society where 500-1,000 people have to come to the same consensus is a herculean task. Hence, we decided to develop a size that larger developers don´t focus on these days. Also, our USP is sales and we have a track record of delivering 7 million sq ft in the past. And, with this profile, we are developing 4 lakh sq ft.

How would you describe the real-estate market in the four cities you operate in?
Chennai is the toughest market as far as customers are concerned. Online marketing and online visibility are extremely important in the southern market. In Mumbai, the role of middlemen or channel partners is high, whereas in Chennai 95 per cent is direct sales, and in Bengaluru 70 per cent is direct sales. So people are attuned and they make intelligent decisions.

From which of these regions are you generating maximum business?
Today, 65 per cent of the business is generated from the primary market. However, our sales office in Mumbai caters to the entire NRI community, which comprises about 35 per cent of the business. The sales order bookings for the year have been Rs 1000 crore, of which Rs 650 crore came from the primary market and Rs 350 crore from across the world. We also have offices in Singapore, Dubai, UK, the US, Australia, Hong Kong, etc.

How are you utilising your funds?
We have taken specific funds for specific projects.
For example, Piramal Funds came into two of our projects: Rs 575 crore for Urbana and about Rs 80 crore in Promenade, which is opposite Phoenix Market City in Bengaluru. Apart from raising funds, we generate revenue through our sales. And the preference is always equity, but there is less equity available as of now in the market.

Last year, the company launched its flagship 10:80:10 scheme. Tell us about the scheme and its success.
The success is brilliant. We will be doing three times the sales of what we were doing earlier. The scheme is simple. You need to pay 10 per cent on booking and the balance money comes through a loan, but we bear the interest for it until construction. Then, the final 10 per cent amount comes from you upon completion. So from a user perspective, you are absolved of the construction risk.

How did the company perform in 2015-16?
Last year was one of the best years for Ozone right from sales, growth and new acquisitions to expanding our footprint across the world. However, doing it once is easy, keeping the tempo on is what we are looking at this year. And, of course, we want to increase our footprint in each market that we operate. This year, we need to grow by 20-30 per cent from the current level.